Dell Technologies' (DELL) excellent fiscal first-quarter results and multiple, powerful catalysts make the stock worth considering for value and growth investors looking for increased exposure to the AI boom. DELL stock has a great deal of positive momentum at this point, making it well-positioned to keep climbing in the near-to-medium term.
Where could Dell be headed from here? Let's take a closer look.
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About Dell Technologies Stock
Dell Technologies is a leading U.S. multinational technology company specializing in computers, servers, storage, and AI solutions. Formed by the 2016 merger of Dell and EMC, the firm is a key player in digital infrastructure, providing products for both consumers and enterprises, from Alienware gaming PCs to PowerEdge servers. In particular, Dell's servers are being increasingly used to run AI workloads, with hyperscalers and AI developers among its major customers.
Currently, Dell has a market capitalization of $272.5 billion. Shares are up 260% for the past 52 weeks and an impressive 220% on a year-to-date (YTD) basis.
www.barchart.com Dell Reports Superb Q1 Earnings
For Q1 fiscal 2027, Dell reported revenue of $43.8 billion, which soared 88% year-over-year (YOY). Meanwhile, non-GAAP EPS jumped 214% YOY to $4.86 per share. The company's impressive results were driven primarily by the AI boom, as its revenue related to AI servers came in at $16.1 billion, up 757% YOY. Dell obtained AI-related orders of $24.4 billion and finished the quarter with a record AI backlog of $51.3 billion.
On the guidance front, Dell increased its top-line and bottom-line outlooks for the full year far above analysts' average estimates. The tech firm now anticipates that it will generate EPS of $17.90 for fiscal 2027, well above the mean forecast of $12.90. Dell is also guiding for revenue of $165 billion to $169 billion, well above analysts' average estimate of $143.4 billion.
Dell Technologies Has Powerful, Positive Catalysts
Dell is a leading provider of rack-scale infrastructure, as CEO Jeff Clarke explained on the Q1 earnings call. With rack-scale infrastructure becoming more widely used, Dell looks well-positioned to capitalize on the trend. Further, the company has many partners at the forefront of the AI boom, including Nvidia (NVDA), Alphabet (GOOGL), OpenAI, Palantir (PLTR), and ServiceNow (NOW), among others.
Meanwhile, when it comes to AI-related computing products, Dell is continuing to gain market share. Boding well for its outlook, traditional server demand continues to run “well ahead of supply in Q1,” according to the CEO.
Importantly, JPMorgan also recently asserted that Dell should benefit from flattening computer-memory costs going forward, while most experts believe that the AI boom is only in its early stages.
The Valuation and Strong Momentum of DELL Stock
With rapid growth and positive catalysts ahead, shares of Dell Technologies are changing hands at a forward price-to-earnings (P/E) ratio of 32.5 times. DELL stock also has a great deal of near-term momentum behind it. The stock has jumped 87% in just the past month and 176% in the past three months, in addition to its massive YTD climb and acceleration over the past 12 months.
Based on 25 analysts with coverage, Dell earns a consensus “Moderate Buy” rating. That consensus breaks down to 16 “Strong Buy” ratings, two “Moderate Buy” ratings, and seven “Hold” ratings. The technical opinion rating on Barchart also points to Dell as a “100% Buy” with a strengthening short-term outlook based on indicators.
On the date of publication, Larry Ramer did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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